The Danish PM said he was impressed with Croatia's progress in preparations for EU membership, and added that a lot remained to be done, but that he was confident Croatia had the necessary political will.
This is the first official visit by a Danish prime minister to Croatia since the country declared independence.
Rasmussen went on to say that all southeast European countries must have a prospect of joining the EU and that Croatia was setting a good example to other countries, as well as that its membership in the EU and NATO could be a valuable contribution to stabilising the region.
Sanader said that Croatia was interested in Denmark's experience on the road to Euro-Atlantic associations and that Denmark had given Croatia pre-accession assistance in the form of a programme aimed at developing the administrative capabilities of the public sector.
He said that Croatia wanted to make bigger steps towards membership in NATO and expected to be given a stronger signal in that regard at NATO's next summit in Riga, in which it was supported by Denmark.
He thanked Rasmussen for Denmark's officially confirming that it would support Croatia's candidacy for a non-standing member of the UN Security Council in 2008.
The two prime ministers agreed that bilateral relations were very good, as well as the economic cooperation.
The Danish PM said that Denmark and other Nordic countries would organise the Nordic Days event in Croatia in November to facilitate trade with Croatia.
Speaking about cooperation in tourism, Sanader said that statistics showed that the number of Danish tourists in Croatia this year went up by 39 percent from last year.
Croatia is interested in Danish investments, and a major greenfield investment was made by the Danish company Rockwool, which invested 75 million euros in a rock wool factory in Istria, Sanader said.